Q: Is the U.S. better off today than it was four years ago? How about individual Americans?

Panel's answer: Yes 5, No 3

Most people judge their current economic status based on recent experiences and/or expectations about tomorrow. Think of all the extraordinary actions that have been taken by all levels of government to create jobs, reduce the unemployment rate and ease the burden on struggling households with little effect. These unacceptable conditions that still plague us have shaped our experiences. So, what about the future and our expectations? Most are focused on the economic consequences of going over the “fiscal cliff” which would likely push us back into a recession, making poor conditions worse. Looking backward and forward it’s hard to conclude that we are better off.

Yes
48% (384)

No
52% (412)

Although the financial free fall and job losses four years ago bottomed and some growth has occurred, we are not better off now because so much more debt has been piled on with no foreseeable solution to contain or solve continuing massive deficit spending. On top of this, federal entitlements and unfunded liabilities continue to grow exponentially while any discussion of reform is dismissed and not resolved. This inevitably leads to the rapidly approaching “real” fiscal cliff stretching beyond just 2012. The burden and uncertainty of not resolving the crisis looms over every individual American’s financial security and solvency.

Four years ago, in the fourth quarter of 2008, the Gross Domestic Product fell by 8.9 percent, the largest quarterly drop in GDP in over 50 years. Over 800,000 jobs were lost in November 2008, and another 5.8 million would be lost in the months ahead. Both situations have been reversed. Although growth has sometimes been sluggish, GDP has now increased for 12 consecutive quarters. Similarly, job growth has turned positive, with four million jobs added in the last 29 months. Many individuals though are still worse off, as the unemployment rate remains high and median income is down due to a weak job market.

The value of real GDP (measured in 2005 dollars) for the second quarter of this year came to $43,200 per person; in second quarter of 2008, it was $43,700. The average private-sector worker today earns $17.11 an hour (again in 2005 dollars), whereas at the end of 2008 they were getting $17.20. The unemployment rate in July was 8.3 percent; in July of 2008 it was 5.8 percent. Over a four-year period, Americans expect and are used to seeing improvements, not losses, particularly when you take into account the fact that four years ago, the U.S. was characterized as being in an economic recession.

While I am aware that this question tempts us to get political when all I can offer is an economic perspective, the U.S. is far better off today than we were four years ago when we were positioned atop an economic cliff, tottering, at the end of the Bush administration. The Obama administration did most of what it had to do to pump money back into the economy to back us off of that cliff. We will never know if the infusion - which wasn't backed by Republicans even though it attempted to accommodate them - was enough. Or whether it was insufficient to ward off the recession and triggered the tepid recovery and continued high unemployment rate that has ensued. The administration has done far too little to aid the housing market, or to create jobs through public infrastructure programs. When measured by the sustained bad employment market, high level of underemployment and lack of consumer confidence, clearly many individual Americans are not yet enough better off.

The U.S. was hemorrhaging millions of jobs at the end of 2007. The housing and commercial real estate markets were headed steeply downhill. We needed to hit the bottom before we could turn the corner and while many Americans remain unemployed or under-employed and many houses are still under water, the trends are mostly positive. Note that we add nearly 100,000 new workers each month, so not only do we need to make up for past job losses but we also need to employ the net new workforce entering the market. This is why unemployment inches up even while net new jobs are added.

And no. The nation is in some ways better off than four years ago when the financial markets appeared on the brink of collapse. Overall national output is up, exports are at a record high, and stock prices have recovered significantly. However, we have 3 million fewer jobs and $5 trillion more in national debt. Individuals would appear to be generally worse off. Adjusted for taxes and inflation, people have less income than four years ago and the jobless rate has climbed from 6 percent to over 8 percent. Can we do better and who can best lead that effort? That is what voters will decide.

By many measures, the U.S. is better off than it was four years ago. The broadest measure of the economy, real GDP, was $13.564 trillion in the second quarter of 2012, compared to $13.187 trillion in the third quarter of 2008. Real consumption was also higher. The stock market and corporate profits are also higher. Employment was falling by 500,000 jobs per month then, and is rising by 100,000+ per month now. On the other hand, unemployment remains above 8 percent (versus 6 percent), and real wages have stagnated. Economic activity in some sectors (construction), and some regions (California) remains depressed.